Commercial Dairy Farming: A safe venture

Recently due to the shortfalls in IT, real estate and other allied sectors several investors have turned to commercial farming. The dairy sector offers a good opportunity for those who are looking for new and expanding markets. While the agriculture sector is more or less stagnant, the dairy sector has gained some momentum. In the past 15 years, milk production in India has doubled and is now over 100 million tons a year thus milk becomes India’s No.1 farm commodity.

India’s milk production is expected to grow at about 3 per cent per year. However, due to increasing population, the per capita availability of milk is expected to increase by only about 1.5 per cent annually. For an economy growing at about 8 per cent per year, this increase in availability will be grossly inadequate. Rate of production growing at only 3 per cent and consumption growing at more than double the rate leads to a mismatch between demand and supply.

The livestock farming in Kerala is no longer a traditional business of certain group of people. Educated entrepreneurs from different social and economic backgrounds are now stepping in to it. Commercial Dairy Farm operate at lower costs and can implement more advanced technologies and systems, which are out of the reach of small farmers. This enables the farmer to get the optimal productivity of each individual cow with minimum labour.

The sector also provides many opportunities for horizontal and forward integration. One can go for expansion by:

Entering in to a milk supply chain either with known organizational consumer or as a finished BRANDED product manufacturer.

Entering the value added product market either in a small or a big way.

Entering in to contract farming arrangements with small farms.(Eg: supply of feed & fodder, animals)

There are several factors that make dairying a safe venture. They are:

The demand for milk and its products is year-round. Demand for milk is increasing day by day.

Unlike other agricultural sectors, dairying is not dependent on rain and production goes on year round.

Returns on this business are available within a day. Today, virtually no other business offers such a short gestation period.

Use of by- products provides additional income and increases returns. For example dung can be used to produce biogas and even electricity and vermi-compost.

Veterinary aid is available in all panchayats.

There is no direct competition from the foreign counterparts.

It is eco-friendly and does not cause environmental pollution as compared to other industries.

Inadequate management of feeding, herd health and lack of quality control in various stages of production can cause major losses affecting the profitability of the entire venture.

Least negligence or delay in any farming activity can cause much loss and disappointment.

Lack of scientific and modern methods, proper training and proper counseling regarding the farm management are some reasons why a dairy might fail.

Another reason why a dairy might incur losses is that the farmer is unaware of the costs incurred and the economics of his day to day business.

Starting the farm

A beginner should definitely get some professional training from any of the governmental training institutions.(Universities , Krishi Vigyan Kendras, Training centres of Animal Husbandry Department ). One needs to decide first on the aim and objective of the farm. Every year there should be a progressive aim for breeding (including number of animals to be maintained) and production.

You can visit dairy farms that run on commercial basis and have a discussion with experienced farm owners. You need not have to rely much on others experience, analyze every event logically and if needed consult with local Veterinarians for more information.

If you plan to manage the farm on your own, look for opportunities to work for an existing farm for a minimum period of three months.

Develop interest and study the feed and fodder market in your region, its difficulties in relation to seasons.

Manage a good team of labourers. You need to choose hardworking reliable persons preferably with some experience. You can also train them for specific jobs.

Visit the cattle market occasionally. Observe animals on sale and talk with persons engaged with purchasing of animals.

Read magazines on Dairy Industry and keep yourself informed.

Courtesy: thehindu.com

Planning

Successful management of dairy farming is planning and putting in to operation a combination of resources such as land, labour, capital and management to get the maximum income from the enterprise. It is better to” grow into” rather than “go into” dairy farming business.

A person new to dairying should start on a smart scale and increase the size of his enterprise over the years. The advantage of such a practice is that when the farmer acquires valuable experience in herd management, it will give him confident in operating on a larger scale. However, the farmer should be able to visualize how his herd will grow over years. On the basis of this, a master plan should first be formulated for the complex of the buildings.

Construction should be undertaken in a phased manner; starting with the most required buildings and adding more in later years as the necessity for them arises. Dairying is a capital intensive farming enterprise .The individual who is establishing himself in the dairy business needs a relatively a large sum of money on a long-term basis for purchase of land and dairy animals, construction of animal houses and to obtain equipment and machinery.

In addition one requires short-term loans as running capitals for the purchase of feed, fodder, fertilizers, etc

Layout

The general layout of dairy farms should be planned depending on the number of animals to be housed, facilities to be provided for feeding the animals, collection of manure, cleaning and washing

An integrated farming approach of dairying with agriculture is the best suited one.

The ideal location of a dairy farm is the suburb of a city or a town so that milk and milk products can be marketed cost effectively.

The cow-shed may be constructed in a single row if the number of animals is 15 or less or in two rows if the number is more, with tail-to-tail arrangement, so that the manure can be removed from the common central gangway between both the ranges of the stall. This is more economical to install an online milking system in the cow shed.

Housing

The cattle-sheds need not be expensive. When designing them consideration must be given to the comfort and health of animals, the economic use of labour in milking, feeding and cleaning, and hygienic milk production.

Farm building should be properly located, constructed, spaced out and grouped. The principle behind housing is towards creating a micro environment inside the animal shed, which may provide protection to the animal against stressful environment.

A stall measuring 1.8 m in length and 1.2 m in width is considered suitable for Indian cows. Mangers and dung channels should be 0.75 m and 0.45 m wide respectively, with all corners rounded up in cement.

The site selected should be dry, elevated and well drained with provision for enough space for future expansion. In coastal areas, the shed has to be oriented across the prevailing wind direction in order to protect the roof from being blown off by high wind and at the same time to provide sufficient air movement in the shed.

The standing space is provided in such a way that the animals are facing the manger. The length and width of standing space is kept variable from 1.5 to 1.8 m and 1 to 1.2 m per animal respectively. The manger should be constructed with a width of 0.75 m in such a way as to facilitate easy cleaning and prevent wastage of fodder. The flooring should be non-slippery, hard and impervious. It must be a concrete one.

A plinth of at least 15 cm in height shall be provided for the floor. The floor may be given a slope of 1 in 60. The manger shall be of continuous type. The manger wall may be constructed with automatic drinking water facilities. The flooring of the manger may be the same as that of the floor but the surface should be smooth with all corners rounded off. A two-way tethering arrangement may be provided with hooks.

The roof shall be a lean-to-type suitably slopped according to local condition. The material for roofing may be G.I./aluminium sheets, asbestos, etc. In summer the roof may be overlaid with thick thatch to lessen heat stress. The eves of the roof should project out at least 75 cm away from the pillars in order to afford protection to the animals from rain and high winds. The height of the eves from the ground level should not be less than 1.75 m and not more than 2.10 metres.

Layout

Roofing and elevation

Courtesy: thehindu.com

Performance monitoring in a dairy farm

Minimum 70% of animals in the herd should be in lactation and of that 30% in first lactation.

First lactation animals should produce at least 60% of milk in the farm in any given time.

Individual cows should have at least 300 days lactation period.

Minimum 60% of the cows in the herd should breed within 60-90 days after calving.

Cows breeding after 150 days or more should not be in any case more than 5 %.

There should not be a single death due to contagious diseases.

Calf mortality up to 6 months of age should not be more than 5% per year.

Non-functional teat should not be more than 1% of the total ( Total teats = Number of cows x 4 )

Total cost on feed should not exceed 70% of net income through sale of milk.

At any given time, Seventy percent (70%) of animals should be in milk where as 20% should be dry pregnant and 10% should be dry empty.

Sixty percent (60 %) of the animals should breed upon first estrous itself.Every year try to improve the daily average milk yield by 15 to 20%. (Achievable only through good management )

Use semen of those bulls which can give progeny with at least 1.5 times of potential of milk production than your herd average.( e.g. if your herd average is 3000 liters per lactation , use bulls having potential of giving progeny with 4500 to 5500 liter herd )

Give incentive to the labors for correct detection of heat (estrous), Good growth rate of calves, feed and fodder saved etc.

Cull non-profitable animal e.g. Animals with productive or reproductive problems. Every year cull 20-30% of animals from the herd and replace them from own grown young stock. Do not cull animals if you do not get better replacement. A regular breeder can be retained even if it is producing 20% less than herd average.

If animals are to be purchased for replacement selection should be done based upon breed characteristics, fertility and milk producing ability.

Quality production ensures profitability as you can get premium price for quality milk besides you can also create good will amongst your customers. (Enhanced brand image)

Courtesy: spb.kerala.gov.in

Record keeping

Complete and accurate herd records are a valuable asset to the management of a dairy farm. A progressive farmer must therefore maintain information on date of birth, sex, color, tag number and other individual identification marks of the animals. Computerization of the data is the need of the hour.

In addition to these, records of breeding and productivity of all animals in the herd should be maintained. These should include dates of services, dates of calving, calves born, number weaned, weaning weight, mothering ability of cows, rate and efficiency of gain in body weight and production, lactation yield, lactation length, dry periods, diseases and treatment given.

These particulars provide valuable information when selecting herd replacements and aid in culling the animals. They are important in determining the net income from livestock enterprise.

Courtesy: bhadrafarms.com

Courtesy: bhadrafarms.com

Farm Management

Good management is the key factor in successful dairy farming.

Provision of readily accessible fresh water and nutritionally adequate food as required.

Emergency provision in the event of breakdown of essential mechanical equipment.

Flooring which neither harms nor causes undue stress.

To derive the maximum benefit, the farm animals must be kept in a state of perfect health. Rearing of animals for their productivity causes considerable strain on the body resources. It is therefore essential that these animals should be provided with optimum management, housing and nutrition.

Conclusion

There are four fundamentals of commercial dairy farming-knowledge, diligence, honesty and capital: without these four combined, no one can possibly succeed for any length of time. The entrepreneur must not think that all before him will be a smooth sailing. He will have to fight for the victory. For this he must follow the right business principles and a proper management system to yield satisfactory profits.